USDCAD has fallen to new lows, trading below the 200-hour moving average at 1.4404, while eyeing the 100-hour moving average support at 1.4368. Recent tariff tensions between the U.S. and Canada have led to heightened market volatility.
Initially, Canada introduced an electricity surcharge, but this was later rescinded. In response, President Trump suggested a potential adjustment to the tariff threat on steel and aluminium, and both nations plan to meet to discuss updates to the USMCA agreement.
Key Support And Resistance Levels
Currently, USDCAD trades around 1.4400, with key levels of resistance at 1.4404 and support at 1.4368. A move above 1.4404 could push the price higher, while breaking below 1.4368 may lead to further declines towards 1.4345 and the lower end of the range at 1.4268-1.4278. Tariff-related news remains a significant factor influencing price movements.
The currency pair remains under pressure, continuing to trade near recent lows. Short-term technical indicators suggest that movement remains constrained between key levels, with traders closely watching for any breach above resistance or a slide below support. Given present conditions, the downward pressure could persist if sellers regain control, particularly if USDCAD remains below the 200-hour moving average.
Recent tensions over trade policy between the two nations have contributed to the pair’s fluctuations. The initial electricity surcharge, though withdrawn, introduced uncertainty that has not fully dissipated. Following this, tariffs on steel and aluminium were brought back into consideration by Washington, keeping market participants on edge. Talks regarding adjustments to the USMCA trade agreement add another element of unpredictability, leaving room for further developments that may shift sentiment.
Future Market Considerations
Price action around the 1.4400 level reflects market indecision. A sustained push higher would require a firm break past 1.4404, potentially extending momentum towards the next upper barrier. Conversely, if sellers drive the pair beneath 1.4368, further weaknesses could follow, with additional downside targets aligning near 1.4345. Should pressure continue mounting, declines may extend towards the broader range bottom between 1.4268 and 1.4278.
Moving forward, trade policy adjustments will remain a focal point, especially any remarks from officials that could alter market sentiment. Shifts in policy direction often generate abrupt movements, requiring traders to remain responsive to statements and scheduled discussions. With historical precedent showing the impact of tariff-related decisions on this currency pair, any official announcements could influence short-term trading strategies.
Attention should also be placed on any shifts in positioning, particularly if market participants increase bets on further declines or reversals. Price action will likely reflect these positioning adjustments, with strong moves likely occurring around key breakout or breakdown levels. Traders should be prepared for unexpected volatility, particularly if further developments emerge in the trade discussions.
